A bout of volatility was witnessed in mid-morning trade as key benchmark indices slipped into the red once again after moving into the positive terrain from negative terrain for a brief period in mid-morning trade. The barometer index, the S&P BSE Sensex, was down 39.56 points or 0.21%, up about 25 points from the day's low and off close to 45 points from the day's high. Mostly lower Asian stocks weighed on sentiment adversely. Index heavyweight and cigarette maker ITC extended intraday losses. Another index heavyweight Reliance Industries (RIL) held firm. The market breadth was positive. Most auto stocks edged higher.
The market edged lower amid volatility in early trade. The Sensex hit 19 week low. The 50-unit CNX Nifty hit lowest level in over 19 weeks. The market hovered in negative terrain in morning trade. The Sensex slipped into the red after moving into the positive terrain from negative terrain for a brief period in mid-morning trade.
The market sentiment was affected adversely by data showing that foreign funds remained net sellers of Indian stocks on Thursday, 4 April 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 326.21 crore on Thursday, 4 April 2013, as per provisional data from the stock exchanges.
At 11:20 IST, the S&P BSE Sensex was down 39.56 points or 0.21% to 18,470.14. The index fell 63.17 points at the day's low of 18,446.53 in early trade, its lowest level since 23 November 2012. The index rose 8.46 points at the day's high of 18,518.16 in mid-morning trade.
The CNX Nifty was down 14.50 points or 0.26% to 5,560.25. The index hit a low of 5,555.15 in intraday trade, its lowest level since 20 November 2012. The index hit a high of 5,577.30 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,175 shares rose and 802 shares fell. A total of 97 shares were unchanged.
Among the 30-share Sensex pack, 20 stocks gained while rest of them fell.
Index heavyweight Reliance Industries (RIL) gained 1.12% at Rs 775.35. The scrip hit high of Rs 778 and a low of Rs 766.20 so far during the day. Shares of Reliance Communications rose 0.88%. Reliance Jio Infocomm and Reliance Communications (RCom) on Tuesday, 2 April 2013, announced the signing of a definitive agreement for approximately Rs 1200 crore as one time indefeasible right to use (IRU) fees for sharing RCom's nationwide inter-city fiber optic network infrastructure. Reliance Jio Infocomm will utilize multiple fiber pairs across RCom's 1.2 lakh kilometres inter-city fiber optic network to provide a robust and future proof backbone for rolling out its state-of-the-art 4G services. As per the agreement, RCom will in turn have reciprocal access to optic fiber infrastructure to be built by Reliance Jio Infocomm in the future.
The agreement provides for joint working arrangements to be put in place immediately for upgradation of the optic fiber network, to ensure seamless delivery of next generation services.
Index heavyweight and cigarette major ITC declined 2.2% to Rs 293.20 on profit booking. The scrip hit high of Rs 299.50 and a low of Rs 293 so far during the day. The stock had hit a record high of Rs 310.75 on 4 February 2013. The government raised the excise duty on cigarettes by about 18% on all cigarettes except cigarettes of length not exceeding 65 mm in Union Budget 2013-14, which was unveiled on 28 February 2013.
United Spirits (USL) rose 0.37% to Rs 1838. JM Financial Institutional Securities, the manager to the open offer of United Spirits said that open offer shall commence on 10 April 2013 and shall close on 26 April 2013. The offer price shall remain at Rs. 1440 per share. The offer price would be paid together with interest computed at the rate of 10% per annum on the offer price from 19 March 2013 till the date of actual payment to all the Public Shareholders who successfully tender their shares in the offer. The open offer is a mandatory offer by Diageo plc to acquire up to 3.77 crore equity shares of USL constituting 26% the enlarged share capital of USL. The open offer is a part of the deal inked by Diageo plc and the UB group whereby Diageo plc will acquire 53.4% of the enlarged USL share capital at an aggregate cost of Rs 11166.50 crore (approximately 1,285 million) in two stages.
Most auto stocks edged higher. Tata Motors rose 0.68%. The company's total sales (including exports) of Tata commercial and passenger vehicles in March 2013 were 72,712 vehicles. The company's domestic sales of Tata commercial and passenger vehicles for March 2013 were 69,160 units. Cumulative sales (including exports) for the company were 8.10 lakh units in FY 2013. Tata Motors announced the monthly sales data on Monday, 1 April 2013.
Maruti Suzuki India jumped 3.87%. The company announced during market hours on Tuesday, 2 April 2013, that its total sales declined 4.8% to 1,19,937 units in March 2013 over March 2012. The company's domestic sales fell 4.3% to 1,07,890 units in March 2013 over March 2012. The company's exports dropped 8.9% to 12,047 units in March 2013 over March 2012
Mahindra & Mahindra (M&M) declined 0.76%. M&M's total automobile sales rose 11% to 51,904 units in March 2013 over March 2012. The company's domestic sales rose 11% to 49,225 units in March 2013 over March 2012. Exports for the month of March 2013 stood at 2,679 units. Sales of passenger vehicles (which includes UVs and Verito) rose 13% to 25,847 units in March 2013 over March 2012. Sales of 4 wheeler commercial segment, which includes the passenger and load vehicles, jumped 17% to 17,212 units in March 2013 over March 2012. Sales of 3-wheelers declined 5% to 4,831 units in March 2013 over March 2012. M&M announced the monthly sales data during trading hours Monday, 1 April 2013.
The company's domestic tractor sales declined 2.31% to 15,551 units in March 2013 over March 2012. The company's total tractor sales declined 0.43% to 17,330 units in March 2013 over March 2012. Exports jumped 20% at 1,779 units in March 2013 over March 2012. M&M announced the monthly tractor sales data during trading hours Monday, 1 April 2013. M&M said that the company maintained its leadership position in the Indian tractor industry during the year ended 31 March 2013 (FY 2013).
Ashok Leyland gained 0.23% on bargain hunting after recent slide triggered by the company reporting a decline in sales in March 2013. The company reported a 2% decline in total sales at 14,020 units in March 2013 over March 2012. However, sales of small commercial vehicle 'DOST' spurted 96% to 4,325 units in March 2013 from 2,211 units sold in March 2012.
Bike makers gained. Bajaj Auto rose 1.56% on bargain hunting after recent slide triggered by company reporting a decline in sales in March 2013. The company announced during market hours on Tuesday, 2 April 2013, that total sales fell 10% to 3.01 lakh units in March 2013 over March 2012. Motorcycles sales declined 11% to 2.67 lakh units in March 2013 over March 2012. Commercial vehicles sales fell 1% to 34,194 units in March 2013 over March 2012. Exports declined 6% to 1,01,374 units in March 2013 over March 2012
Shares of Hero MotoCorp rose 0.08%.
L&T declined 0.24%. The company said during market hours today, 5 April 2013 that its construction division has secured new orders valued over Rs 2004 crore across various segments in March 2013.
The Q4 March 2013 corporate earnings season will begin around mid-April 2013. Infosys announces Q4 results on 12 April 2013. IndusInd Bank announces Q2 results on 18 April 2013. Cairn India announces Q4 results on 22 April 2013. HDFC Bank announces Q4 results on 23 April 2013. Axis Bank will announce its Q4 March 2013 results on 24 April 2013. ICICI Bank announces Q4 results on 26 April 2013.
On the political front, the DMK on 19 March 2013 withdrew support to the Congress led UPA government at the Centre citing differences on the issue of atrocities on Tamils in Sri Lanka. After the withdrawal of support by the DMK to the UPA government on 19 March 2013, Parliamentary Affairs Minister Kamal Nath on 20 March 2013 said the government was not a lame duck government and was stable. He said that no party has challenged the government for a floor test.
The UPA has already been reduced to a minority government after Trinamool Congress withdrew support to the government in September last year. The Samajwadi Party (SP) along with its regional rival in Uttar Pradesh Bahujan Samaj Party (BSP) provide outside support to the UPA government. SP has 22 MPs in Lok Sabha and BSP has 21 MPs.
The Reserve Bank of India (RBI) will announce the Monetary Policy Statement 2013-14 on 3 May 2013. The RBI cut its key policy rate viz. the repo rate by 25 basis points to 7.5% after a mid-quarter monetary policy review on 19 March 2013. The key macroeconomic priorities are to raise the growth rate, restrain inflation pressures and mitigate the vulnerability of the external sector, RBI said at that time. Even as the policy stance emphasises addressing the growth risks, the headroom for further monetary easing remains quite limited, the RBI said. The RBI said it will continue to actively manage liquidity through various instruments, including open market operations (OMO), so as to ensure adequate flow of credit to productive sectors of the economy.
The upside on the bourses may be capped as reduction of promoter stake to meet the Securities & Exchange Board of India (Sebi) mandated minimum public shareholding of 25% for private companies and 10% for state-run firms will result in supply of equity in the market over the next few months. As per the Sebi mandated minimum public shareholding rule, private-sector companies must cut founders' stake to adhere to the rules by 30 June 2013, while the deadline for state-run firms is 31 August 2013. PSU divestment will also add to share sale glut in FY 2014. The government has set a target of Rs 40000 crore from divestment of government stake in state-run firms and Rs 14000 crore from divestment of stake in non-government companies for FY 2014.
The India Meteorological Department will issue its first forecast of 2013 southwest monsoon in this month.
The finance ministry in October 2012 announced a five-year plan to cut fiscal deficit. The government hopes to reduce the fiscal deficit to 3% by March 2017.
The second half of the Budget session of the Parliament begins on 22 April 2013. The Budget Session of the Parliament ends on 10 May 2013. The government has lined up a number of key bills for consideration and passing during the Budget session of the parliament, which include The Forward Contracts (Regulation) Amendment Bill, 2010, The Pension Fund Regulator and Development Authority Bill, 2011, The Land Acquisition, Rehabilitation and Resettlement Bill, 2011, The National Food Security Bill, 2011 and The Insurance Laws (Amendment) Bill, 2008.
Assembly elections will be held in Karnataka on 5 May 2013 and the counting of votes and results of the election will be declared on 8 May 2013.
Most Asian stocks fell on Friday, 5 April 2013. Key benchmark indices in Hong Kong, Singapore and South Korea fell by 0.24% to 2.51%. Indonesia's Jakarta Composite rose 0.26%. Markets in China and Taiwan remain closed for a holiday.
Japan's Nikkei Average jumped 2.4%. The Bank of Japan yesterday boosted its stimulus program, saying it will double the monetary base within two years.
Trading in US index futures indicated that the Dow could fall 28 points at the opening bell on Friday, 5 April 2013. US stocks rose on Thursday as cheer over Japan's monetary stimulus overcame resistance that came as US jobless claims climbed to a four-month high. The Labor Department reported that those filing for state unemployment benefits rose by 28,000 to a seasonally adjusted 385,000, the highest number since November and more than expected. The data came ahead of Friday's monthly nonfarm-payrolls report and after data Wednesday showed the economy created just 158,000 private-sector jobs in March.
In Europe, European Central Bank (ECB) President Mario Draghi yesterday signaled the ECB will keep monetary policy loose for an extended period and that further easing is possible if economic conditions deteriorate. ECB has left its main interest rate unchanged at the historic low of 0.75%.
The Bank of England has decided not to restart its bond-buying programme this month amid mixed signals on the health of the fragile UK economy. In a widely expected move, the Monetary Policy Committee on Thursday kept the stock of asset purchases in its quantitative easing programme on hold at 375bn. It also kept the BoE interest rate at an all-time low of 0.5%.
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